Professor’s Comments Before the Open 10/16/2020

Posted by OMS  at October 16th, 2020

The wave pattern for the past three days suggests that the decline is small corrective wave 4 within a five wave up sequence. If this is the case, wave 5 up should start to develop within the next day or so.

There was a small change in the A-D oscillator last night, so we could see a Big Move in the markets within the next 1-2 days. If that move is up, it could signal the start of wave 5 up.

Also, yesterday’s volume on the NASDAQ was the lowest in over a month. This low volume occurred while the NASDAQ pulled back which is usually a positive sign.

Right now, the Daily Scalp Trading Indicators on the QQQ are mixed. The volume indicator is slightly negative while the momentum is positive. Mixed indicators after a rising trend usually mean the market is correcting, either in a wave 2 or a wave 4. So IF the Q’s start to head higher, the Model will re-enter its position once the indicators give say so.

BTW, the Sector Ratio remains at 23-1 Positive. In other words, the sectors are still very strong even after the recent correction.

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Gold: Just before yesterday’s close, the Model used 20 percent of its cash to buy GLD at 179.03.

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ

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